“Such agreement, effective for the tax years from 2015 to 2019, enabled [the company] to state significant extraordinary income in the six-month period under review in the taxation line,” Prada said in the statement.

Revenue totalled 1.57 billion euros, up 2.3 per cent from 1.54 billion euros a year earlier, matching analyst expectations.

In line with last year, Europe accounted for most of Prada’s revenue, with sales up 6.2 per cent year-on-year to 593 million euros, while Asia-Pacific sales ranked second at 498.6 million euros, easing 4 per cent on year, making it the only region to contract. Sales in the Americas ranked third by region, rising 5.7 per cent, while Japan ranked fourth, with sales rising 5.4 per cent.

Sales in Asia-Pacific were “negatively affected by social unrest and forex headwinds in Hong Kong,” said Alexandra Cozzani, chief financial officer at Prada, on a conference call to discuss financial results for the first half.

She said Hong Kong sales account for “mid-single digits” of Prada’s overall sales.

A wave of civil protests have gripped Hong Kong for eight weeks, in what started as a backlash against a proposed extradition bill which would allow suspects to be sent to mainland China, but which has since been suspended and declared “dead” by the city’s Chief Executive Carrie Lam Cheng Yuet-ngor.

Cozzani said sales on the Chinese mainland had benefited from an advertising and marketing campaign, without citing figures for the country.

“Chinese sales are stable, and they are probably buying more at home than abroad,” she said. “This is due to our activity, and also the initiatives by the government to repatriate spending in mainland China.”

Amid a slowing economy, Beijing has been encouraging domestic consumption through initiatives like tax reductions and subsidies.

From April 1, Prada reduced prices of all Prada and Miu Miu products sold through its directly operated online and offline stores in China, in line with the government’s decision to the lower value-added tax from 16 per cent to 13 per cent. Prada counts Miu Miu as well as British footwear manufacturer Church’s among the brands it owns.

Prada said global in-store sales dropped slightly over its decision to end seasonal markdowns, or discounts, to strengthen “the brand desirability and the customer relationship”, according to the statement.

Prada said the response of the markets to its decision to halt end-of-season discounts “were positive, as demonstrated by steady growth of the full-price sales over the six-month period”.

Wholesale revenues rose almost 15 per cent in the six months ended in June, mainly due to growth in deliveries to European online retailers.

Prada is reducing its wholesale business and in 2020 will cut it by 50 per cent, in an effort to boost control over how its products are positioned in the market. The fashion house said it expects impacts from the reduction in its wholesale business to start being felt in the second half.

Of the 27 analysts polled by Bloomberg, seven had a “buy” recommendation, 11 rated the fashion house as “hold” and nine analysts had a “sell” recommendation. Analysts had an average 12-month price target of HK$23.18, down 3.6 per cent from Prada’s closing price on Thursday.

The fashion house, founded as a leather goods shop by brothers in Milan in 1913, ended Thursday’s trade in Hong Kong down 0.82 per cent at HK$24.05, before the results announcement. The share has dropped 6.78 per cent so far this year and on June 3 hit an all-time low of HK$20.75.